Major Win For Whistleblower Rights
California Labor Code section 1102.5, subpart b protects employees who disclose information to a supervisor or person with authority to investigate, if the employee has reasonable cause to believe that the information discloses a violation of state or federal statute, or a violation of or noncompliance with a local, state, or federal rule or regulation.
California Labor Code section 1102.6 states, with emphasis added:
In a civil action or administrative proceeding brought pursuant to Section 1102.5, once it has been demonstrated by a preponderance of the evidence that an activity proscribed by Section 1102.5 was a contributing factor in the alleged prohibited action against the employee, the employer shall have the burden of proof to demonstrate by clear and convincing evidence that the alleged action would have occurred for legitimate, independent reasons even if the employee had not engaged in activities protected by Section 1102.5.
As noted in the recent case of Lawson v. PPG Architectural Finishes, Inc., despite 1102.6’s burden-shifting framework, many California courts have applied the McDonnell Douglas burden shifting framework to 1102.5 claims while treating 1102.6 as an affirmative defense. 12 Cal. 5th 753, 2022 WL 244731 (2022). Under the McDonnell Douglas test, the plaintiff must first set forth a prima facie case of retaliation. Id. The burden then shifts to the employer to articulate a legitimate, nondiscriminatory reason for the adverse employment action. Id. at *3. The burden then shifts back to the employee to prove that the employer’s reasons are pretext. Id.
Answering a certified question from a panel of the U.S. Ninth Circuit Court of Appeals, the California Supreme Court held that the burden-shifting framework in 1102.6 supplants the McDonnell Douglas test for Labor Code section 1102.5 claims. Lawson, 2022 WL 244731 at *4.
In stark contrast to McDonnell Douglas, which merely shifts the burden of production to the defendant at the second stage, under 1102.6 the burden of persuasion is shifted to the employer once the employee has shown that her protected activity was a contributing factor in a prohibited action. Lawson, 2022 WL 244731 at *3-*4. Importantly, an 1102.6 plaintiff is not required to show that her protected activity was the only reason for the prohibited action. Id. at *5-8 (citing State Comp. Ins. Fund v. Ind. Acc. Com., 176 Cal.App.2d 10, 17 (1959)). “A ‘contributing factor’ includes ‘any factor, which alone or in connection with other factors, tends to affect in any way the outcome of the decision.’” Id. at *5 (citing Rookaird v. BNSF Ry. Co., 908 F.3d 451, 461 (9th Cir. 2018)). Mere temporal proximity between an employee’s protected activity and the termination is sufficient to establish contributing factor causation. Day v. Staples, Inc., 555 F.3d 42 (1st Cir. 2009); Stewart v. Doral Financial Corp., 997 F. Supp. 2d 129 (D.P.R. 2011).
Furthermore, in contrast to McDonnell Douglas, an 1102.5 plaintiff is not required to prove that the reasons offered by the employer are pretextual. Lawson, 2022 WL 244731 at *7. Requiring an employee to prove that the employer’s reasons are pretext is inconsistent with contributing factor causation. Id.
The Lawson decision is a big deal for whistleblowers. This landmark decision will make it significantly more difficult for employers to obtain summary judgment in whistleblower retaliation cases, which will give more whistleblowers their day in court.